Recent research from the International Longevity Centre-UK (ILC-UK) and the Personal Finance Research Centre (PFRC) at the University of Bristol has painted an up to date picture of “financial wellbeing in later life”, exploring issues as broad as patterns of spending, debt, financial satisfaction and quality of life in older age.
As part of the report, David Hayes and Andrea Finney of PFRC used new analysis of the 2010 Living Costs and Food Survey to explore how types and levels of expenditure vary among the over 50s, and classified older households into six groups based on their main patterns of expenditure.
Over half of older households turn out to be low-spending, financially constrained ‘Conservative Consumers’ or ‘Burdened by Bills’. In more detail, these are:
- Conservative Consumers comprises 46% of older households. The striking feature about this group is that they spend far less on non-essentials than older households as a whole. Their average weekly spend on recreation and culture is £20, compared with an overall average of £33; and £10 per week on eating out compared with £19 overall. These tend to be older households: 22% of them are headed by someone aged 80 or over, compared with 15% of all older households. The majority (56%) said their main source of income was welfare benefits.
- Burdened by Bills account for 11% of older households. They are distinct because they spend a very high proportion on housing, fuel and power (£4 in every £10, which is twice the average). Most of this goes on housing costs, which is likely to be rent payments as 70% live in rented homes. Like the Conservative Consumers, this group tends to have low incomes.
The report, ‘Financial wellbeing in later life - Evidence and policy’, says that the oldest households spend proportionately more on essentials than luxuries. It warns that the findings are important in light of media hype about the spending power of post-war generations, especially when public spending cuts are expected to continue.
“There is a real danger that politicians and policymakers focus on a poorly-defined group called ‘baby boomers’ while older people such as Conservative Consumers and those Burdened by Bills - and the very real issues that they face - are forgotten,” it says.
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